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05 DECEMBER 2018 AL CIRCLE

Weaker demands and brisk aluminium transactions lead to declining ingot prices in China: SMM

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

According to an update by Shanghai Metals Market, trades of spot aluminium remained brisk yesterday, December 4, across east and south China after futures aluminium prices recorded a one-day gain at the start of the week.

The SHFE 1812 contract traded range-bound in the morning. In Shanghai, spot discounts were heard at RMB 50 per tonne to RMB 40 per tonne, compared to RMB 60 per tonne to RMB 50 per tonne in the previous day.

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In Shanghai and Wuxi, on the other hand, most transactions were heard at RMB 13,650 per tonne to RMB 13,660 per tonne while that in Hangzhou at RMB 13,680 per tonne to RMB 13,700 per tonne. Traded prices across eastern markets stood some RMB 20 per tonne lower than yesterday.

Downstream consumers purchased on demand while trades between traders were active. 

In Guangdong, most spot transactions occurred at RMB 13,740 per tonne to RMB 13,750 per tonne. A major aluminium trader made large purchases this morning, which fuelled trading enthusiasm among traders.

Shanghai Metals Market found aluminium prices across Chinese markets would likely remain downside in the remaining days of the year given the weak demands and new capacity coming online.

Today, on December 5, the price of A00 aluminium ingot recorded a further decline from yesterday by RMB 10 per tonne and stood at RMB 13,650 per tonne. The average prices are expected to range between RMB 13,630 per tonne to RMB 13,670 per tonne, with spot discounts to settle at RMB 70 per tonne to RMB 30 per tonne.

However, today’s decline has not touched all the major markets in China. Only the southern market had registered a plunge by RMB 20 per tonne from the previous day and hovered at RMB 13,730 per tonne.

The downtick in social inventories for the past 34 consecutive weeks as of Tuesday also failed to pull up the ingot price. In the meantime, sluggish consumption across end-users held aluminium processors back from purchasing aluminium ingot.

In terms of raw materials, aluminium prices are expected to receive little cost support this winter as less strict production curbs could limitedly bolster prices of the pre-baked anode and aluminium fluoride. Recent dips in traded prices of alumina cemented the anticipation of waning cost support.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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